Identifying & Understanding Customers (AQA GCSE Business)

Case Study

TradeUp is a high street retailer that buys, sells and exchanges second-hand entertainment products and technology. These products include video games, mobile phones and tablet computers. TradeUp was established in 2002.

The demand for some second-hand products, such as mobile phones, changes quickly. Amelia needs to make sure that her prices are competitive with other second-hand retailers otherwise she will lose customers.

Table 1 Extract of Income Statement for year ending April 2020

Amelia has always liked her location in a busy town centre and has never had any direct competition. This location has provided Amelia with loyal customers who like the convenience of being able to visit her store when they are in town shopping. However, another retailer located nearby has announced that it will start to offer a similar service to TradeUp. Amelia has heard that a unit on an out-of-town retail park has become available. She has found out that although the size of the unit at the retail park is bigger than her current location, the rent would be £825 per month, which is lower than her current payment of £1100 per month. There is a bus link every hour to the retail park and lots of free parking; however not all her current employees can drive.

Case Study

Krispy Kreme opened its first UK store in 2003 in London. The business sells doughnuts containing responsibly sourced ingredients in their stores, coffee shops, kiosks and cabinets in Tesco. Doughnuts can also be ordered online.

Krispy Kreme received planning permission from Glasgow City Council before converting a historic Glasgow building into their newest store. The store took £60 000 on its first day (three times Krispy Kreme’s previous record). Some customers travelled hundreds of miles. There were traffic queues on local routes for much of the first week.

The business supports the communities in which it operates. A policy of recruiting the long-term unemployed has worked really well.

In January 2015 Krispy Kreme relaunched their coffee products because Krispy Kreme aims to operate ethically. The coffee is sourced from Rainforest Alliance Certified TM farms in South America that are managed in a way that looks after the land and protects the planet. This coffee costs 20% more than coffees that do not carry the Rainforest Alliance seal.

Krispy Kreme sell their coffee at £1.90 per cup. Research shows that some coffee shop customers are willing to pay more for ethically produced coffee and that most of these customers expect to pay around 10% more for this type of coffee.

Case Study

TradeUp is a high street retailer that buys, sells and exchanges second-hand entertainment products and technology. These products include video games, mobile phones and tablet computers. TradeUp was established in 2002.

The demand for some second-hand products, such as mobile phones, changes quickly. Amelia needs to make sure that her prices are competitive with other second-hand retailers; otherwise she will lose customers.

Table 1 Extract of Income Statement for year ending April 2020

Amelia has always liked her location in a busy town centre and has never had any direct competition. This location has provided Amelia with loyal customers who like the convenience of being able to visit her store when they are in town shopping.

However, another retailer located nearby has announced that it will start to offer a similar service to TradeUp. Amelia has heard that a unit on an out-of-town retail park has become available. She has found out that although the size of the unit at the retail park is bigger than her current location, the rent would be £825 per month, which is lower than her current payment of £1100 per month. There is a bus link every hour to the retail park and lots of free parking; however not all her current employees can drive.

Case Study

Devine Jewellery (DJ) plc is an international business that sells a range of luxury jewellery items, such as bracelets, necklaces and rings. The business was started by British jewellery designer Dev Anand, who developed a unique selling point (USP) for jewellery that can be personalised with a message or initials. This USP has attracted customers from all over the world. All DJ products are crafted from high quality gold and gemstones. This has enabled DJ to create an exclusive brand image that has attracted wealthy customers who are keen to own a personalised design.

Dev understands that his business must be willing to respond to current trends to grow sales. Silver jewellery is very common, as it is much more affordable than gold. Other reputable brands already sell jewellery in a range of precious metals, including silver.

Dev is keen to produce a new jewellery collection using silver instead of gold. The new collection would not be personalised or include gemstones, making it more affordable for customers in the mass market. Silver items could also be delivered to customers within seven days, two weeks quicker than personalised gold products. The current selling price of DJ’s best-selling gold bracelet is £4700. A silver version of this bracelet would be sold for £1175.

Case Study

JCC Shoes is a manufacturer and retailer of shoes. The business has a reputation for making shoes that are strong, hard-wearing and comfortable. The business is facing increasing competition from other shops selling school shoes. Competitors’ shoes are regarded as more fashionable. In response to this competition, JCC Shoes has redesigned some of its shoes.

During the last year, there have been some newspaper reports of children being sent home from school for wearing JCC Shoes branded ‘Scope Shoes’. These shoes are sold as part of JCC Shoes’ new redesigned school range. Many schools are reporting that the shoes are too similar to trainers and do not meet their rules on uniform.

Over the last two years, JCC Shoes has increased its use of social media to improve interaction with customers. Posts are made daily on new shoes and events, such as price discounts, and enquiries can be answered quickly. The business encourages customers to respond to its posts, add their own comments, and upload pictures and videos.

Number of customer responses on social media posts by JCC Shoes (000’s)